Hayes Predicts Federal Reserve Money Printing to Fund Iran Military Operations
BitMEX co-founder Arthur Hayes suggests that prolonged involvement by Donald Trump in costly "Iranian nation-building" efforts could push the Federal Reserve toward increasing monetary supply.
BitMEX co-founder Arthur Hayes believes the US Federal Reserve may shift away from its hawkish monetary stance to help fund America's military engagement with Iran, a development that could provide significant tailwinds for cryptocurrency markets.
In a blog post published Monday, Hayes pointed out that beginning in 1985, every American president has initiated military operations in the Middle East region, and in each instance, the Federal Reserve has reacted by reducing interest rates and increasing the money supply to provide financial support for the conflicts.
"The longer Trump engages in the extremely costly activity of Iranian nation-building, the higher the likelihood that the Fed lowers the price and increases the quantity of money to support Pax Americana's latest bout of Middle Eastern adventurism," he added.
According to Hayes, historical precedents including the 1990 Gulf War, the Global War on Terrorism that followed the Sept. 11 attacks in 2001, and the military "surge" in Afghanistan during 2009 all led to Federal Reserve interest rate reductions or various forms of monetary easing.
During the weekend, the US and Israel conducted a coordinated series of airstrikes targeting Iran that resulted in the death of the nation's supreme leader, Ali Khamenei, with President Donald Trump vowing to maintain the military campaign.
Hayes advises a wait-and-see approach
"We do not know how long Trump will remain interested in spending billions, if not trillions, of dollars reshaping Iran's politics to his liking, nor how much geopolitical and financial markets pain he can politically tolerate before he cuts and runs," said Hayes. "The prudent action is to wait and see."
"The time to back up the truck and buy Bitcoin and high-quality shitcoins [...] is immediately after the Fed cuts rates and or prints money to support the government's goals in Iran," he added.
In recent commentary, Hayes has floated additional theories regarding potential Federal Reserve monetary policy approaches, including predictions over the last three months that the central bank would initiate quantitative easing either due to a novel liquidity mechanism called Reserve Management Purchases, to provide relief during the Japanese bond crisis, or because artificial intelligence-driven job displacement would trigger a credit crisis.
Futures show only marginal drop
Following the joint Israel-US military strikes against Iran, cryptocurrency-focused social media platforms experienced an uptick in references to "World War 3" throughout the weekend, based on data from Santiment.
Despite this increase, the volume of mentions remains significantly below the levels observed in June 2025 when Israeli forces conducted strikes targeting Iran's nuclear facilities and military infrastructure, triggering a 12-day military confrontation.
Meanwhile, oil market prices have already reversed nearly half of their initial opening gap upward, while the S&P 500 index has declined by less than 1%, according to the analysis.
